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The security budget for next summer's Pan Am Games in Toronto was far too low, and arrangements to protect venues and athletes are behind schedule, auditor general Bonnie Lysyk warned Wednesday.

Lysyk did a special audit after the opposition parties complained that the Liberal government awarded a contract for the bulk of private security services at the Games to a company that did not have the lowest bid.

The government's decision to award the contract to Contemporary Security Canada was fair, even though at $81 million it was $14 million higher than the next lowest bid, concluded Lysyk.

"The selection processes ... were fair and transparent, complied with government procurement policies and applied lessons learned from other similar sporting events," she wrote.

"However, we had concerns with the timing of security procurement and the communication of the related expected costs."

The auditor said the private security contract was budgeted in 2013 at only $42 million, far lower than the $81 million contract that was awarded.

"Our only concern was that the budget for security procurement was understated and should have been more accurate," wrote Lysyk. "We noted the same understatement of budgets for other, smaller security procurements."

Pan Am organizers now estimate security costs at $247.4 million, more than double the original estimate of $121.9 million in Toronto's bid for the Games.

"I wouldn't say it was a deliberate ploy to mislead people," Lysyk told reporters. "It really wasn't until there was more information, more work being done on security planning, when they started to appreciate that number was too low."

Sport Minister Michael Coteau could not explain why the private security budget for the Games was off so much just a year ago, and said he would not put a firm limit on the security budget because there could be a change in the threat level.

"What would it look like knowing this government put a hard cap on security and comprised the safety of Ontarians," Coteau asked reporters. "If the cost increases because of a (higher) threat level, I'm quite comfortable with that."

Increased threat level?

Deputy OPP Commissioner Brad Blair said the threat level was increased last month after a gunman shot a soldier at the Ottawa war memorial before storming Parliament Hill, where he was fatally shot by security.

"The threat level has changed, which means there's a heightened awareness, not only within law enforcement but also with the general public," said Blair. "Until we see a specific threat to these games, I would say our planning principles would not change."

Arrangements to ensure athletes and officials have secure access to the field-of-play zones at Pan Am venues and to protect the athletes and their equipment are behind schedule, warned Lysyk.

"With only nine months before the Games begin, TO2015 had only just issued a request for proposals for contract asset protection security services, nor had it completed all procurements for security equipment," she said. "TO2015 was supposed to look after the venue of play security, and that hasn't been completed."

The opposition parties said they feared security was just one area where the Pan Am Games' organizers would blow the budget.

"There's a real good chance we'll be back here in November of next year, after the Games are over, and you're going to see that every piece of the pie involving the Pan Am Games is way over budget, and it's the taxpayers of Ontario that are going to have to pay for those overruns," said Progressive Conservative Todd Smith.

"If they're messing up so much with respect to the security costs, how much more is out there that we don't know about yet," asked New Democrat Jagmeet Singh.

The Toronto security estimate is just a fraction of the nearly $900 million spent on security at the Vancouver Olympics, but officials believe there is a lower risk profile at the Pan Am Games, with far fewer high-profile dignitaries expected to attend.

In September, the province had to pump another $74 million into the Games, most of it because of lower than expected sponsorship revenues.

The government was criticized for not including the $709 million cost of the athletes' village in its original $1.4-billion budget for the Games, which now is expected to top $2.57 billion and could go even higher.

"It could increase even more depending on future risk and threat assessments and changes in the scope of the Games," said Lysyk.